November mortgage data

[Peter Walther]

I thought I'd share this information from Black Knight Financial:

December 22, 2022 Data & Analytics

• Prepayment activity in November dropped 15.6% to a single month mortality (SMM) rate of 0.40% – once again marking the lowest rate on record since before 2000 when Black Knight started reporting the metric
• The national delinquency rate rose another 3.5% in November to 3.01%, up 10 basis points since October, driven by a 31K (+3.9%) increase in 30-day delinquencies and a 25K (+11%) rise in 60-day delinquencies
• The delinquency rate in Florida rose another 18 basis points in the month to 3.60% as the impact of Hurricane Ian on homeowners’ ability to make mortgage payments continues
• Improvement among seriously past-due loans continues to stagnate, with the population of 90-day delinquencies ticking down -0.2% from the month prior
• Foreclosure starts rose again (+19%) on the heels of October’s increase, but the month’s 23.4K starts are still below the recent high seen in June 2022 and remain 30% below pre-pandemic levels
• Foreclosure was started on 4.3% of serious delinquencies in November, up 7 basis points from October but still 44% less than the rate seen in the years leading up to the pandemic
• Active foreclosure inventory rose 5.3%, though 2022 volumes remain subdued after the record lows of 2021 due to widespread moratoriums and forbearance protections

[Peter Walther]

My opinion is as valuable as the next guys, but I suspect the Fed will continue to raise rates and reduce its balance sheet.  That will increase the vig on rising consumer debt and slow loan origination more even more.  I think the question won't be will unemployment raise, it will be by how much and how fast and how long will the unemployed be able to make the mtg payments.  The relief under the pandemic mtg programs is expiring and borrowers will have to start making payments again adding additional defaults.